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Brokers urged to review class codes and experience mods ahead of renewal
Insurance Business, citing Redvo Insurance Solutions, says workers' comp pricing depends on class codes, a lagging experience modification factor, and carrier appetite, not just the renewal rate.
Staffing agencies heading into workers' compensation renewal season often focus on the rate alone, but Insurance Business, citing Redvo Insurance Solutions, says premium is driven by three inputs brokers can help clients address before the renewal audit.
According to Redvo Insurance Solutions, premium is calculated under the NCCI rating structure per $100 of payroll within each classification code. The brokerage notes that each policy classification can carry a different rate, so payroll booked to the wrong class code can be corrected only after the annual audit, leading to either an additional premium bill or a return.
The report also highlights the role of a lagging experience modification factor and which carriers are willing to write the account, saying both can materially affect pricing. Redvo CEO Fadi Faraj is quoted as saying the workers' comp industry is complicated and requires specialists to manage the details for staffing clients.